On July 1, Year 1, Danzer Industries Inc. issued $40,000,000 of 10-year, 7% bonds at a market (effective) interest rate of 8%, receiving cash of $37,282,062. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
| 1. | Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1. | ||||
| 2. | Journalize the entries to
record the following:*
|
||||
| 3. | Determine the total interest expense for Year 1. | ||||
| 4. | Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest? | ||||
| 5. | Compute the price of
$37,282,062 received for the bonds by using the present value
tables. (Round to the nearest dollar.)
|
In: Accounting
. The Rangaletta Company issues a five-year, zero-coupon bond on January 1, Year One. The bond has a face value of $200,000 and is issued to yield an effective interest rate of 9 percent. Rangaletta receives $129,986. On January 1, Year Three, Rangaletta pays off the bond early by making a payment of $155,000 to the bondholder. Make all journal entries from January 1, Year One, through January 1, Year Three assuming the effective rate method is applied. 6. Do problem 5 again but assume that the straight-line method is used.
In: Accounting
Hummus Company began operations on January 1, Year 1. Selected ending balances for Year 1 are:
Accounts receivable, $5,600
Allowance for doubtful accounts, $790
Hummus Company experienced the following events during Year 2:
Earned $225,000 of revenue on account
Collected $175,000 cash from accounts receivable
Paid in advance a one-year lease for office rent, $12,000; rental period began May 1, Year 2
Salary expense was $45,000, of which $40,000 had been paid at the end of Year 2
Operating expenses were $125,000, of which $100,000 had been paid at the end of Year 2
Wrote off $2,000 of uncollectible accounts
Adjusted the accounting records to reflect management’s belief that 3% of sales on account will be
uncollectible. Hummus Company uses the allowance method for accounting for bad debts.
Collected $500 from accounts that had been previously written off
(3 points) Question 1 – What is Hummus Company’s net income for Year 2?
(3 points) Question 2 – What is the net realizable value that Hummus Company will report on its Year 2 balance sheet (after all adjusting entries have been made)?
In: Accounting
Private nonprofit four-year colleges charge, on average, $26,755
per year in tuition and fees. The standard deviation is $6,752.
Assume the distribution is normal. Let X be the cost for a randomly
selected college. Round all answers to 4 decimal places where
possible.
a. What is the distribution of X? X ~ N(
b. Find the probability that a randomly selected Private nonprofit
four-year college will cost less than 25,013 per year.
c. Find the 66th percentile for this distribution. $ (Round to
the nearest dollar.)
c. Find the 66th percentile for this distribution. $Incorrect
(Round to the nearest dollar.) 29540
Please show step by step.
In: Statistics and Probability
In: Finance
Private nonprofit four-year colleges charge, on average, $26,470
per year in tuition and fees. The standard deviation is $6,683.
Assume the distribution is normal. Let X be the cost for a randomly
selected college. Round all answers to 4 decimal places where
possible.
a. What is the distribution of X? X ~ N(,)
b. Find the probability that a randomly selected Private nonprofit
four-year college will cost less than 30,818 per year.
c. Find the 74th percentile for this distribution. $ (Round to the
nearest dollar.)
In: Statistics and Probability
In: Finance
In: Finance
The annual sales for Salco, Inc. were $ 4.55 million last year. The firm's end-of-year balance sheet was as follows: Current assets $499,000 Liabilities $1,001,500 Net fixed assets 1504000 Owners' equity 1001500 Total Assets $2,003,000 Total $2,003,000 LOADING.... Salco's income statement for the year was as follows: Sales $4,550,000 Less: Cost of goods sold (3,506,000) Gross profit $1,044,000 Less: Operating expenses (495,000) Net operating income $549,000 Less: Interest expense (101,000) Earnings before taxes $448,000 Less: Taxes (35%) (156,800) Net income $291,200 LOADING.... a. Calculate Salco's total asset turnover, operating profit margin, and operating return on assets. b. Salco plans to renovate one of its plants and the renovation will require an added investment in plant and equipment of $ 1.08 million. The firm will maintain its present debt ratio of 50 percent when financing the new investment and expects sales to remain constant. The operating profit margin will rise to 13.5 percent. What will be the new operating return on assets ratio (i.e., net operating income divided by total assets) for Salco after the plant's renovation? c. Given that the plant renovation in part (b) occurs and Salco's interest expense rises by $ 48 comma 000 per year, what will be the return earned on the common stockholders' investment? Compare this rate of return with that earned before the renovation. Based on this comparison, did the renovation have a favorable effect on the profitability of the firm? a. Calculate Salco's total asset turnover, operating profit margin, and operatin
In: Finance
The following information indicates percentage returns for stocks L and M over a 6-year period:
| year | stock L returns | stock M returns |
| 1 | 14.79% | 20.57% |
| 2 | 14.3% | 18.19% |
| 3 | 16.47% | 16.2% |
| 4 | 17.86% | 14.43% |
| 5 | 17.6% | 12.53% |
| 6 | 19.39% | 10.98% |
In combining [L−M] in a single portfolio, stock M would receive
60% of capital funds. Furthermore, the information below reflects
percentage returns for assets F, G, and H over a 4-year period,
with asset F being the base instrument: Year Asset F Returns Asset
G Returns Asset H Returns
| year | asset F returns | asset G returns | asset H returns |
| 1 | 16.23% | 17.04% | 14.1% |
| 2 | 17.48% | 16.33% | 15.32% |
| 3 | 18.11% | 15.41% | 16.2% |
| 4 | 19.25% | 14.1% | 17.22% |
Using these assets, you have a choice of either combining [F−G] or [F−H] in a single portfolio, on an equally-weighted basis.
Required: Calculate the absolute percentage difference in the
coefficient of variation (CV) between the stock portfolio [L−M] and
the portfolio which outlines the optimal combination of
assets
.
In: Finance